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IT Equipment Leases To Dip While Software Leases To Gain

New systems management and virtualization software are contributing to a shift in the market, analysts with IDC report.

The worldwide IT leasing and financing market, traditionally driven by equipment leasing, will instead see strong growth gains in the financing of IT software and services in the coming years, according to IDC.

In a report released Thursday, the market research firm predicted the worldwide IT leasing market will hit $100 billion in 2010 -- up from $70 billion in 2006. The growth during that period will calculate out to more than 8% compound annual growth rate per year.

The equipment leasing share of that total market is expected to drop about 20 percentage points between 2006 and 2010, IDC said, bringing software and services leasing to a 50% market share.

"New systems management and virtualization software stands poised to streamline end-user processes for provisioning and de-installing IT servers, storage, and network equipment, driving fundamental changes in end-of-lease portfolio dynamics," said Joseph Pucciarelli, program director for IDC's Technology Financing Strategies research team, in a statement.

Pucciarelli added that the changes will produce market opportunities for several companies, including CIT Group, GE Capital, HP Financial Services, IBM Global Financing, Microsoft Financing, and Oracle Financing Division.

IDC said the IT equipment leasing segment will experience growing pressure from new accounting treatments and increased global competition as well as from slow limited increases in IT equipment spending growth.

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